nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2016‒06‒18
four papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. Everything you always wanted to know about bitcoin modelling but were afraid to ask By Fantazzini, Dean; Nigmatullin, Erik; Sukhanovskaya, Vera; Ivliev, Sergey
  2. The Internet of Things: Seizing the Benefits and Addressing the Challenges By OECD
  3. Financial Literacy for Increasing Sustainable Access to Finance in Nepal By Ramesh Prasad Chaulagain
  4. Remittances of foreign workers in Italy: an estimation of invisible flows in the "informal channel" By Giacomo Oddo; Maurizio Magnani; Riccardo Settimo; Simonetta Zappa

  1. By: Fantazzini, Dean; Nigmatullin, Erik; Sukhanovskaya, Vera; Ivliev, Sergey
    Abstract: Bitcoin is an open source decentralized digital currency and a payment system. It has raised a lot of attention and interest worldwide and an increasing number of articles are devoted to its operation, economics and financial viability. This article reviews the econometric and mathematical tools which have been proposed so far to model the bitcoin price and several related issues, highlighting advantages and limits. We discuss the methods employed to determine the main characteristics of bitcoin users, the models proposed to assess the bitcoin fundamental value, the econometric approaches suggested to model bitcoin price dynamics, the tests used for detecting the existence of financial bubbles in bitcoin prices and the methodologies suggested to study the price discovery at bitcoin exchanges.
    Keywords: Bitcoin, Crypto-currencies, Hash rate, Investors' attractiveness, Social interactions, Money supply, Money Demand, Speculation, Forecasting, Algorithmic trading, Bubble, Price discovery.
    JEL: C22 C32 C51 C53 E41 E42 E47 E51 G17
    Date: 2016
  2. By: OECD
    Abstract: The Internet of Things represents the next step in convergence between ICTs and the economy on an unprecedented scale, with estimates indicating that 25 billion devices will be connected by 2020. Network connectivity, widespread sensor placement and sophisticated data analytics enable applications to aggregate and act on large amounts of data generated by devices in homes, work places and the natural world. This aggregated data can drive innovation, research and marketing, holding the promise to substantially contribute to further economic growth and social prosperity. However, the degree of adoption and ability to reap its benefits will largely depend on the capacity of governments to create adequate policy and regulatory frameworks in key areas including telecommunications, security, privacy and consumer policy. This report provides information on the opportunities and challenges around the Internet of Things and identifies areas for engagement and ease of deployment by all stakeholders.
    Date: 2016–06–07
  3. By: Ramesh Prasad Chaulagain (Nepal Rastra Bank)
    Abstract: Recent policies and practices of Nepali financial sector are focused to establish financial institutions to increase people’s ‘access to finance’. As a result, the numbers of financial institutions licensed both by Nepal Rastra Bank and Government of Nepal are growing rapidly. All the institutions are doing the similar functions in the same market. The financial institutions licensed by Nepal Rastra Bank are classified into commercial banks, development banks, finance companies and micro finance development banks, whereas the Government of Nepal licenses to the saving and credit cooperative socieites (SACCOS). Despite the supply sided endeavors, the demand side considerations in financial sector is more silent. This creates a concern about the capability of people in consuming financial services. As a result, quality and sustainable access to finance are in question. Furthermore, the expansions of such institutions are also concentrated in urban, semi-urban and priviledged areas causing unequal distribution of institutions and limited access to finance. This situation has given rise to unhealthy competition among the actors focusing on earning rather than empowering the financial consumers. This paper explores how far the expansion of Banks and Financial Institutions including cooperatives assures the access to finance and its sustainability. The secondary data shows a significant growth of financial sector and an increment of number of people involved in financial transactions in the banking industry. However, the primary data of the study shows that such expansion is necessary but not sufficient condition to assure a sustainable access to finance. The study also explores the worth of financial literacy among the people both in urban and rural areas as one of the means to enhance people’s access to finance and its sustainability. The paper is based more on the discussion and analytical approach with a mix of secondary and primary sources of data.
    Keywords: Financial literacy, Financial sustainability, Access to finance
    JEL: G21 G29
    Date: 2015–09
  4. By: Giacomo Oddo (Banca d'Italia); Maurizio Magnani (Banca d'Italia); Riccardo Settimo (Banca d'Italia); Simonetta Zappa (Banca d'Italia)
    Abstract: This paper examines the determinants of outgoing remittances from Italy and presents a methodology for quantifying the share of remittances not sent via official intermediaries (money transfer operators, banks, post offices) but transferred through informal channels and hence not measured and not included in official data. The existence of invisible flows can be inferred from the positive and statistically significant empirical relation between distance of the recipient country and average per capita remittance, after controlling for all other relevant explanatory variables. Such a relation should be null or non-significant if flows were observed in their entirety. Exploiting this empirical relation and relying on the detailed geographical breakdown of the data collected by the Bank of Italy, our proposed methodology estimates the informal channel to account for between 10 and 30 per cent of total outflows, mostly directed to countries closer to Italy. Our analysis shows a reduction in the share of informal remittances on total outflows: over the ten-year observation period it has shrunk by about 20 per cent.
    Keywords: remittances, immigration, balance of payments
    JEL: F22 F24 O15
    Date: 2016–06

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